GM's Vauxhall:Break Even in 2002

BIRMINGHAM, England October 23, 2002; Brian Lysaght writing for Bloomberg reports that General Motors Corp.'s Vauxhall division expects to break even this year, helped by more vehicle sales and lower costs, said Vauxhall Managing Director Kevin Wale.

"We've made excellent progress this year," said Wale in an interview at the British Motor Show. "We've taken structural costs out and we've improved the business."

The U.K. unit of the world's biggest carmaker hasn't been profitable since 1999. Vauxhall had a 2001 pretax loss of 101 million pounds ($156 million). The carmaker closed its Luton, England, assembly plant early this year, cutting about 2,000 jobs. Sales will probably rise to about 350,000 vehicles this year from 310,000 last year, Wale said.

The cost cuts will help Vauxhall afford the 1 percent to 2 percent decline this year in net prices to customers, Wale said. Falling net prices are a sign carmakers in the U.K. are offering larger discounts, analysts have said.

General Motors has said it may not reach this year's target of cutting its European business's loss in half to $350 million. The Ruesselsheim, Germany-based Adam Opel AG unit, which is larger than Vauxhall, is cutting jobs and getting rid of unused plant capacity and Chief Executive Carl-Peter Forster said last month that Opel probably won't be profitable this year. Opel had a 2001 operating loss of 674 million euros ($660 million).